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Brexit – will the flying public notice any meaningful difference?

  • Market Insight 8 janvier 2021 8 janvier 2021
  • Royaume-Uni & Europe

  • Brexit

Brexit – will the flying public notice any meaningful difference?

Authors: Rob Lawson QC, Tom van der Wijngaart, Mark Bisset, Jess Harman & Inês Afonso Mousinho

On 23 June 2016, the UK public voted by referendum that the UK should leave the EU. On 29 March 2017, the then UK government acted upon that seismic result by giving notice to the European Council that the UK would be leaving the EU. Since then there has been much debate as to what the UK's relationship with the EU would be when 'Brexit' was finally achieved and, materially, what it would mean for the aviation industry and flying public. The UK formally left the EU on 31 January 2020, but continued to apply EU law as if it was a Member State until the end of a transitional ‘implementation period’, which expired on 31 December 2020. Negotiations as to what would happen thereafter continued up to the wire, resulting in a Trade and Cooperation Agreement announced on 24 December 2020 (TCA). The TCA has been signed by the UK's Prime Minister and the President of the EU Commission, and approved by the UK Parliament. It now awaits formal approval by the EU Parliament and the Member States. Assuming that the TCA does represent the new reality, the question arises as to what it means for us all?

The now completed Brexit undoubtedly involves a significant structural change in the legal landscape having regard to the extent to which aviation law in the UK was derived from EU law pre-Brexit, as well as the benefits enjoyed by both parties – i.e. the UK, and the EU and remaining EU 27 Member States, respectively (the Parties) – as part of the EU Single Aviation Market. Carriers will need to adapt to it accordingly. But in terms of optics there is an important question: will the flying public notice any meaningful difference? For the reasons explained below, the answer to that appears at this stage to be: no, not really, subject to the possibility of gradual divergence in the future - and, of course, the unrelated but considerable and very much ongoing impact of the Covid-19 pandemic.

So far as the flying public are concerned, and leaving aside wider immigration and border considerations, what really matters is whether Brexit will have any impact on: the places between which they are able to fly as between the UK and EU 27 Member States and within the EU as compared to pre-Brexit; the carriers they can use for these purposes; the price of such travel; the relevant safety and security standards; and/or a passenger's legal rights of redress against the carriers on which they fly. These points will be addressed below.

The TCA preserves the right of UK air carriers and EU air carriers to fly across the territory of the other Party without landing and to make stops for non-traffic purposes, and, importantly, to perform point-to-point services between the territories of the two Parties. UK and EU airlines, and passengers, can therefore fly between the UK and the EU as before, which includes for the purpose of destination or onwards transit to a third country (i.e. it should not affect the ability to hub traffic as between the UK and EU). It further allows them to carry passengers to two different points in the territory of the other Party as part of the same service (i.e. co-terminalisation). In giving these rights, the TCA confirms that neither Party shall unilaterally limit the volume of traffic, capacity, frequency, regularity, routing, origin or destination of such air transport services, or the aircraft type or types operated for that purpose by the air carriers of the other Party (except as may be required for customs, technical, operational, air traffic management, safety, environmental or health protection reasons, in a non-discriminatory manner). Whilst the TCA anticipates carriers having to obtain operating authorisations in advance of permitted traffic rights being used, these should be issued with minimal procedural delay, subject to a closed list of criteria being met, and therefore present no artificial hurdle to service performance.   

What qualifies as an EU carrier for these purposes remains as it was before the TCA i.e. one having, in essence, ownership and control in the hands of nationals of EU Member States, States of the European Economic Area or Switzerland, and holding an EU operating licence from an EU State in which it has its principal place of business. However, UK stakeholders no longer count for these purposes. EU air carriers may have to adjust their ownership and control accordingly - as several have already done, for example by restricting voting rights of their extant UK shareholders. In contrast, the TCA enshrines a more liberal approach to what qualifies as a UK air carrier. It allows for the mirror of this, but also permits nationals of EU 27 Member States, States of the European Economic Area and Switzerland to count for UK ownership and control purposes in respect of any air carrier holding a valid UK operating licence as at the moment of true Brexit (i.e. 31 December 2020). Accordingly, extant UK carriers will continue to qualify, and to do so without having to make any alteration to their ownership and control.

In contrast, the TCA confirms that UK carriers are not permitted to undertake services using their own aircraft within the territory of an EU Member State, or between two EU Member States, as they could when, as a Member State, the UK was part of the EU Single Aviation Market; and an EU carrier can similarly no longer provide services between two points within the UK. It is in anticipation of this prohibition that several carriers have set up related carriers in the other Party (such as Wizz UK and easyJet Europe), so that their brand can continue to be put on services within the other Party's territory, even if they cannot perform those services themselves. The position of EU air carriers to fly within the EU and of UK air carriers to fly within the UK remains as before.

The TCA further permits code sharing agreements between UK and EU air carriers. These can be used for the purposes of the point-to-point services referred to above. In addition, an air carrier of one Party can use them to carry passengers from a point within its own territory to a point in the territory of the other Party on its own aircraft, with the passengers then continuing their journey under the same contract of carriage to a further point within the territory of the other Party, or beyond, flying on a codeshare service operated by an air carrier of the other Party.

As a result of the above, from the passenger's perspective: the ability to travel by air between the UK and EU 27 Member states should largely be the same as it was pre-Brexit; and on the same carriers as before; and the ability to travel by air within the EU, and within the UK, will be the same as it was pre-Brexit, save that it will not necessarily be possible to do it on the same carriers as before.

The economics for carriers of having to comply with the structural change in the legal landscape post-Brexit is not yet clear and will probably only become apparent over time. However, the TCA does go a reasonable way towards removing unnecessary, and partisan, price distortion in that it:

  • commits the Parties to eliminate, within their respective jurisdictions, all forms of discrimination that would adversely affect the fair and equal opportunity of the air carriers of the other Party to compete in the exercise of the rights provided for by the TCA;
  • requires the Parties to agree to cooperate in removing obstacles to doing business for air carriers of both Parties where such obstacles may hamper commercial operations, create distortions to competition or affect equal opportunities to compete;
  • provides (on the basis of reciprocity) for the exemption from taxes, fees and duties in respect of all equipment and supplies that remain on an aircraft upon arrival in the territory of the other Party;
  • requires that any user charges imposed by one Party on the air carriers of the other Party for the use of air navigation and air traffic control shall be cost-related, non-discriminatory and no less favourable than the most favourable terms available to any other air carrier in like circumstances at the time the charges are applied; and
  • allows air carriers to freely establish their own tariffs on the basis of fair competition.

It is therefore to be hoped that the price of air travel to the flying public will not be disrupted unduly by the fact of Brexit.

Licensing, safety and security standards and assurance are complex topics, and ones the flying public do not usually delve into, but rather take on trust (in what is generally speaking a well-regulated industry worldwide). Upon Brexit the UK ceased to be a member of the EU Aviation Safety Agency, but has retained a considerable volume of EU law in these areas as part of its own domestic law (with all necessary modification). Furthermore, the TCA has reaffirmed the importance of close cooperation of the Parties in the field of aviation safety and provides for mutual recognition of the other Party's certificates of airworthiness, certificates of competency and licences for the purpose of operating air services as referred to above. It also obligates the Parties to:

  • provide upon request all necessary assistance to each other to address any threat to the security of civil aviation;
  • act in conformity with the aviation security standards established by ICAO;
  • ensure that effective measures are taken within its territory to protect civil aviation against acts of unlawful interference; and
  • endeavour to cooperate on aviation security matters "to the highest extent."

This being so, it is to be hoped that safety and security standards will not be prejudiced by Brexit. There is certainly no reasonable basis for believing that either Party will lessen their standards in these regards.

Lastly, the substantive content of a passenger's legal rights of redress against the carriers on which they fly are not materially altered by the TCA or by the happening of Brexit. Liability for death and personal injury to and delay of passengers, and for loss or damage to their baggage, will continue to be governed by the Montreal Convention 1999 in almost all cases (although the legal structure by which it does so may change in relation to some carriage and carriers). In terms of wider consumer protection, by the TCA the Parties have:

  • affirmed a shared objective of "achieving a high level of consumer protection" and to cooperate to that effect;
  • agreed to ensure that effective and non-discriminatory measures are taken to protect the interests of consumers in air transport, including appropriate access to information, assistance including for persons with disabilities and reduced mobility, reimbursement and, if applicable, compensation in case of denied boarding, cancellation or delays, and efficient complaint handling procedures; and
  • agreed to consult each other on any matter related to consumer protection, including their planned measures in that regard.

It is notable in this context that the UK has transposed into its domestic law (and with all necessary modification), amongst other provisions of EU law, EU Regulation 261/2004 (on denied boarding, cancellation and long delay) as well as Regulation (EC) No. 1107/2006 (on rights of disabled persons and persons with reduced mobility when travelling by air). It has further enacted that the related jurisprudence of the European Court of Justice (CJEU) will continue to form part of the UK’s law (but CJEU decisions made after Brexit was completed will not). In practical terms and effect, the law in these areas will therefore continue to be the same going forward so far as air travel within and between the UK and EU is concerned, save perhaps in so far as any future CJEU judgment on such topics expands EU law in these areas but the UK chooses not to follow it (notwithstanding the share objective enshrined in the TCA).

In conclusion, whilst the TCA is short of the comprehensive air transport agreement to which many in the industry and commentators, and indeed the Political Declaration setting out the framework for the future relationship between the EU and UK agreed in October 2019, aspired, it is substantially better than would have been the case in the event of a 'no-deal' hard-Brexit. Although the 'new normal' does involve a significant structural change in the legal landscape underpinning aviation as between UK and the EU, there are good grounds for saying that the flying public are unlikely to notice any meaningful difference as a result of Brexit, at least in the short term.

Fin

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